How Does Bad Debt Protection Work?

The invoice finance company credit checks your customers, and assigns credit limits for each one.

Some providers will allow you to select debtors for bad debt protection, so that you can reduce costs.

Providing you trade within those credit limits your invoices are covered.

The covered percentage can vary but it is up to 100% of the value.

If a covered invoice isn't paid the invoice finance company pays you the balance.

There may be a "first loss clause" which is like the excess on say car insurance.

What Does Bad Debt Protection / Non Recourse Cost?

The cost of the bad debt protection / non recourse option starts from c. 0.35% of turnover. The cost for your business will depend upon the type of facility that you want and the nature of your business. We can find quotations for you without obligation - we provide independent advice: